The host of Econtalk provides his take on our ep. 174 on The Wealth of Nations, and explores with us the idea of emergent economic order. As preparation, we all listened to a June 2017 episode of Econtalk that featured Russ, Mike Munger, and Don Boudreaux, so you should too! For a graphic introduction to this idea, see wonderfulloaf.org.

Is the economy profitably thought of as a machine? Like the behavior of a natural system like a liquid or gas whose behavior can be described using simple laws and perhaps manipulated? As a garden? A rainforest? Are the unplanned results of mass economic activity always good?

Russ leans libertarian but has a nuanced view honed through over 600 episodes of Econtalk, where he's talked to economists of all stripes. Like Smith, Russ recognizes that wealth is not the only good, that the economy is not going to serve all human needs, and that government regulations and infrastructure can be helpful and even necessary.

We talk through what "invisible hand" really means, tariffs and trade policy for less-developed countries, dehumanizing labor, self-interest, how Adam Smith's picture in The Wealth of Nations relates to his account of moral judgments in The Theory of Moral Sentiments (discussed on PEL and at great length on Econtalk), how to induce changes in popular mores, and whether Smith's moral concepts can handle the progressive character of morality (e.g., how people figured out over time that slavery was bad).

To learn more about some of the topic discussed, listen to these episodes of PEL:

Comments

I listened to this talk and then went listened to the EconTalk podcast on “emergent order” before listening to this talk a second time. My general impression is that Russ Roberts runs too fast and loose with the concept of emergence, perhaps in pursuit of his own ends. As far as I can tell, Roberts deems any apparent order that lacks an apparent cause as having emerged. So, for instance, he (somewhere) refers to rush hour traffic speed as an emergent phenomenon. The concept of self-organization in the context of this talk is similarly loosely conceived.

Let me suggest two criteria of self-organization for your consideration. The first comes from Kant’s Critique of Teleological Judgment (and I recommend a Podcast on this text) and the second comes from contemporary self-organizing systems theory. First: Kant says (roughly) that “in general, in order for something to be judged as self-organizing, two conditions must be met. First, each part of the thing must exist in a reciprocal causal relationship with all the other parts, such that the “form” that each part takes is constrained by each of the other parts. Second, the totality of this reciprocal constraint generates a whole, as an effect, which also appears to us as the cause “the point” (or purpose) of the parts and all their activities.” So, Kant says, “that the connection of efficient causes can simultaneously be judged to a causation through final causes.” (KU 373)

In order to further clarify the concept, Kant considers a tree. The various parts of a tree, he suggests, exist interdependently. The leaves, stems, and roots mutually generate each other. If one cuts down a tree, leaving only a bit of the trunk, then new shoots are sent up. If one cuts off a stem, then, under the right conditions, roots and leaves are produced. Hence, the parts of the tree appear to produce each other and, in so doing, they produce a whole (i.e., a particular tree), for the sake of which the activities of the parts then appear to exist.” (http://dignus.ca/the-theory/)

The second criteria comes from Ilya Prigogine’s work and builds on Kant’s. In this case, the generated form – the apparent final cause – must generate a discontinuous increase in the rate of “entropy production”; that is, in the rate at which this system can “settle” (literally or analogically get rid of heat). Incidentally, I can conceive of anamnesis along these lines.

Now the formation of Benard cells and crystals meets these criteria, as does the formation of any living entity. I believe that the formation of an ecosystem meets these criteria, but the point is debatable. However, it is not clear to me that an economy does, at least I would need to hear an argument on the matter. It is, furthermore, not clear to me that slow rush-hour traffic meets these criteria.

As an addendum, I would like to point out that a debate on whether government should “control’ the economic system can only remain a debate between worldviews insofar that we ignore the implications of the fact that the laws themselves are the product of self-organization for the debate. If networked constraints of individual making decisions both permits the economy to function magically and also magically generates the laws that constrains individual decisions then there (potentially) only one system here (and it would seem to be practical, in the Kantian sense of that term..

.(For an interesting read see also: “Invisible Hands: Self-Organization and Eighteenth Century. These historians do not have a clear concept of self-organization either. They run rough shod over it. But that is forgivable, because it is not their main concern and they are not trying to “do” anything with the concept. An economist, by contrast, is trying to “do” something practical with the concept in and so owes us clarity.)

Pardon if I am not understanding your comment fully. I haven’t listened to his Econ talk yet and I really need to bc I do have a lot of questions but it never seemed to me as though he thought emergent order was anything that had no apparent cause. It felt like his point was that there is a bottom up order that happens and not just a top down. It seemed that he argued like a Darwinian saying that the bottom up emergence is much more complex and nuanced than any centralized organizer, or divine organizer in Darwin’s case, could be. I’m pretty sure Darwin was influenced by these kinds of ideas! Maybe anyway. I think about evolution a lot and how it isn’t actually designed and how we have so many amazing qualities that allow for our survival that it seems it must be on purpose – but that’s the thing – it wouldn’t be as such if it didn’t survive! However, we do have some things that are really not great as a result of our evolution – some psychological characteristics that don’t serve our happiness at all but are great for survival. So his point is well taken IMO. Our natural tendencies have created a pretty great economic system but his point and perhaps Smith’s point may have been that it’s not perfect. There are checks and balances but at the end of the day bc it’s not perfect there’s will always be pretty tragic gaps.

So ignore this if it makes no sense or misses your point – when people bring up “a Kantian sense” I get completely lost.

Let me begin by addressing some confusion caused by my comment that Mr. Roberts deems as emergent any order that lacks an apparent cause. Mr. Roberts advances a picture of the economy that is inspired by F.A. Hayek among others and which explains economic order as an effect of the interaction of parts. Roberts views the contemporary notion of emergence as capturing, at a universal level, key aspects of this way of thinking about the economy. This view, he contrasts, with an account of economic order that requires an “orderer”.

His enthusiasm for the concept of emergence, as I suggested above, seems to me such that he employs it without much thought wherever no orderer is apparent,

Roberts also appears to wish to integrate his view with evolutionary theory and so your comments are understandable. But it is not clear to me that the contemporary view which he wishes to employ; particularly self-organizing systems theory will “play nice” with evolutionary theory. In fact, self-organizing systems theory is arguably a competing view to Darwinian evolution. For Darwinian evolution is committed to contingency; that is, to the idea there is no particular species that is produced necessarily. But self-organizing systems theory implies that anything that emerge is an eternal form; that, given the right conditions, it was bound to emerge. Natural selection is an external feedback mechanism. Self-organization is internal and not so clearly subsumable under the category of mechanism. So, for instance, there is a sense in which Raleigh-Benard cells are eternal objects that were destined (as it were) from the beginning of the universe to emerge as soon as the right conditions appeared. This kind of logic can be extended to all truly self-organizing (emergent) entities, such as living things.

What Mr. Roberts (and many other people, I suspect) would like to do is have their emergent cake and to eat it; that is, they want to hang on to the view of the universe as a giant effect which was introduced in the Renaissance and simultaneously suggest that the forms that you encounter are self-organized and emergent. But the very idea of something being emergent points to its pre-existence, in some form, and this is downplayed.

Finally, to speak to your confusion about Kant. For Kant, for something to be “practical” just means that it relates to “doing” as opposed to ‘thinking’ (practical vs theoretical). Kant is easier to read once you recognize that he is a self-organizing systems theorist (from about the B-edition of the first Critique onward).

(Note: Please accept my apology for any typos in this message. I find the 5 minute editing window challenging.)

I’m really enjoying this particular comment thread, Michael, but I wonder if you could please indulge us some more. First, could you offer a little bit more background on Prigogine, Bernard cells and crystals, and anamnesis, and why you chose to highlight these items to illustrate your point, versus possible other alternatives? (I know we can do just as well to wiki them ourselves, of course, but I would prefer to understand their relevance straight from you. This is merely for my informational awareness.)

Second, if I gather correctly what you are trying to drive at here with your critique, it’s that the episode guest Russ Roberts would like to BOTH view the market economy (1) as some sort of grand, benign natural accident (meaning, therefore, that we humans – as mere players in this ongoing, evolving ‘Darwinian ecosystem’ – are simply left to go about our business as organic participants in the drama, surviving or perishing dependent on our personal adaptability), AND (2) as an idealized end-state, emerging as the uncanny effect of the fortuitous meeting of minimally-organized order and a constellation of laissez-faire principles (i.e. meaning, in this case, that now that we’ve seen to the development of this abundantly fecund goose, really it’s foolish – nay!, even counterproductive – to try to do anything collectively, as an economic community, to tweak the Golden Eggs)?

Okay, now that’s one heavily-packed question I just laid out there, I realize, but I hope all my caveats and brackets will have done it due justice. Your basic and final point, however – if I’m capturing it smartly – is that we EITHER concede, as bit actors, that we are free to act in any number of ways toward the economy, and learn what works over time by iterative trial-and-error (via the Darwinian conceit), OR we assert that there is some real magic out there regarding the ’emergent’ economy, so much that it is almost beyond our collective human ability to fully understand, and so we rather best be very self-conscious about our human economic actions, for the outsized impact they may have on our teleologically-designed effect.

But, to your analysis, to breezily accommodate both borders on, or even plainly lives in, the realm of cognitive dissonance?

I will be flattered to have your additional thoughts; much obliged in advance.

Raleigh-Benard convection is one of the iconic examples of self-organization in contemporary physics. A useful introduction to the topic is to be found here: http://www.entropylaw.com. I recommend that you have a look at it. Benard cells also, I think, classify as genuinely emergent.

My question is whether economic order is a relevantly similar phenomena to Raleigh-Benard convection or any truly self-organizing entity, which always tends to appear to us as something that nature intended to produce. There is a nice paper on the topic here: http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.485.8178&rep=rep1&type=pdf
But economic order, it seems, may simply mechanical and fully analyzable as such – a balance of forces, etc.

Roberts says someplace that not all emergent order is good. By good, he appears to intend things that we like; that humans judge to be good. But all self-organizing systems are good to the extent that the universe is good. If the economy is a self-organizing system in the same sense as Benard cells, crystals, and living things then this natural economic order is good, if the universe is good.

The key question in deciding whether a thing is truly self-organizing is whether the whole is simply the effect of the organization of the parts or whether it can simultaneously be judged to the be cause of that order; whether it is, in fact, the cause is another question. All the parts of a cat exist for the sake of the production of that cat. The cat, thereby, appears as a kind of natural purpose – a term that Kant appears to design specifically to be oxymoronic. It is as if the universe was designed to produce this thing. {From the perspective of physics, I think that the discontinuous increase in entropy production is definitive.} Now, is a smoothly functioning capitalistic economy such an entity? Does it meet the necessary criteria?

That’s where I am, Luke. I’d like to understand what Michael is saying because even if I didn’t agree, I feel like it would help me make some pretty important distinctions with regard to emergent order. I have listened to some of the Econ talk episode and feel even more so that Roberts argues for the bottom up idea of order within our economic system. I’m grateful for anyone willing to discuss anything with me regarding these topics because I learn best in discussion format and people in my circles think it’s strange that I would want to listen to anything like this!

Micheal – this concept is really bugging me! I wonder – are we trying to find out whether or not the economic system is complicated versus complex? In other words – does it behave in such a way that one can figure out why should one have the ability to tease apart the elements? Or is it truly complex and therefore emergent – meaning something arises that cannot be predicted based on the sum of its parts. I’m just putting this out there – no worries about not responding.

Regarding evolution and feedback that you mentioned before. Much of the economy – particularly what he discusses about bread in his poem – came about through a feedback response system.

I really hope a podcast is done on this subject and that some of these things are discussed because I find this fascinating!

My impression, once again, is simply that Mr. Roberts enthusiasm for the free market is the driving force behind his appropriation of talk about emergence and self-organizing systems. Now, he may, in fact, be on to something. Perhaps free moving price mechanisms together with a system of laws provide sufficient constraint on human decision making to generate a whole (a well-functioning economy?) as an effect which we can, at the same time, judge to be designed; that is, which appears to us as if it were designed.

But I am unsure of these matters. If a well functioning economy were such an entity (a self-organizing entity) then I would expect it to “lock-in” to a kind of stability when it was well-functioning and also to be analyzable using the tools and terminology of dynamical system’s theory. (I am aware that some work has been done along these lines.) I would also expect it to appear as such a whole – as a natural purpose – more obviously than it seems to.

Thanks Michael! I listened to his discussion on emergence and I also began listening to his series with Dan Klein about the theory of moral sentiment. It’s a great series and it is very clear what you mean by the “pursuit of his own ends.” I completely get your point now. He came across much softer or flexible in this podcast. I do really enjoy it nonetheless. I hope you guys do a podcast on emergence. I really appreciate your time.

Thank you for the explanation. I have to think about the concepts of self organizing systems, evolution and the idea of natural selection. I think things that self organize would tend to be selected for and so it would be a sort of part of the process in evolution – a partner in it rather than a counter to it. I guess all of this concept is a bit muddier for me than I originally thought.

I’m also still trying to sort through this idea that emergence equates to self organizing – if Roberts is saying that properties that arise within an economic system are order from chaos. I didn’t quite pick up on that. There are things that come about as a result of the Interaction within the ecosystem and that they are often good but not specifically that order comes from chaos.

I’m going to continue to listen with this in mind and see if I can get a better idea of where the beef is exactly. I really appreciate you taking the time to respond. I wish I had a better grasp of these concepts! Whatever I have missed in your explanation and poorly responded to I assure you is no fault of yours! Thanks again!

Thanks for those additional links, Michael. I’m still not sure I understand, however, what you finally want to say about Roberts’ agenda (i.e. the implications of both ‘having his emergent cake and eating it, too.’) Is your point that he would have us believe the contemporary free market economy is both a naturally-selected effect of the world (in the Darwinian sense) AND something whose end-state was specifically intended by nature (i.e. with teleological purpose) to occur?

If this is what you want to argue, what are we to take from it philosophically? That folks of this persuasion are saying the economy is both a random phenomenon (i.e.,, basically accidental) and also perfectly-designed? In which case the two notions logically contradict each another, huh, and therefore he is incoherent? Or, rather, do you want to more precisely point up that our collective attitude toward the free market economy should differ based upon which conception (effect or emergence) we take here to be a more compelling explanation?

Please develop the implications of your critique a little more, if you will indulge.

Hey, Michael, we’ve wanted to do an actual episode on emergence for a while, and you may be a good person for us to either have as a guest or consult with re. Exactly what to read. Can you please email me at mark@partiallyexaminedlife.com so we can get some dialogue going about this?

I’m going to agree with Michael that Russ Roberts “runs too fast and loose” with the concepts in this episode. I was surprised with how much everyone was “persuaded by his optimism,” and I wish there had been more critical pushback. The anecdote in which Roberts casually describes his old Marxist roommate as the “least fit for an assembly line” got glossed over with chuckles instead of an important check: actually no one is suited for an assembly line. Who are these people who are “more” suited for such an existence?

It also struck me as odd when he repeatedly said something to the effect of “other people dispute me, and they have evidence to back up their case, but I disagree.” Indeed this does sound like rhetoric in “the pursuit of his own ends,” as Michael put it.

Hi Jessie, I appreciate your desire for pushback. Since we already got to have our say in ep 174 (and for years before that), and the discussion was at a high enough level of generality that it was difficult to really argue with a lot of the points he was making, I was chocking this one up to “food for thought” rather than trying to score points (which is not my thing anyway). My hope is that we’ll get back to some of these topics in a future episode to more specifically address some of what he was saying (though the chances of our talking more about tariffs is roughly zero). 🙂

I was not myself persuaded by his optimism and remain sympathetic to New Work, to Debord’s critique of consumerism (which we didn’t get into), and to claims (which we’ll just have to explore in a future episode on Das Kaptial or something) that something might be fundamentally flawed in the capitalist economic equation (if there even is such a thing). But I found it refreshing that Russ did NOT hold the line on the inviolability of the market a la a purist libertarian like Mieses. Russ did not have outlandish and absolutist enough positions to really be amenable to simple pushback.

I’ll be interested to hear the opinions from those above about what he says about the impartial spectator in the second half of this podcast. That seemed pretty fast and loose to me! Sorry if that’s a spoiler! Hopefully just a teaser.

http://robertreich.org/post/61406074983
“In reality, the “free market” is a bunch of rules about (1) what can be owned and traded (the genome? slaves? nuclear materials? babies? votes?); (2) on what terms (equal access to the internet? the right to organize unions? corporate monopolies? the length of patent protections? ); (3) under what conditions (poisonous drugs? unsafe foods? deceptive Ponzi schemes? uninsured derivatives? dangerous workplaces?) (4) what’s private and what’s public (police? roads? clean air and clean water? healthcare? good schools? parks and playgrounds?); (5) how to pay for what (taxes, user fees, individual pricing?). And so on.

After listening to this episode, I feel compelled to point out a few critical issues you touched upon. My reaction is pretty much based on the fact that to me as a European, the libertarian worldview prevalent in the US seems a little crazy at times. I do think every culture has some blind spots at some deep level when it comes to politics and this is a very American one – “big government” is just such a non issue in our countries, although there are certainly very good arguments for let’s say labour market liberalization. I took from the interview that the libertarian position is based on the premises that a) government (although itself an emergent phenomenon) is a restrictive top-down mechanism and b) markets are bottom-up patterns emerging from the day to day interactions of free individuals. If you look at the empirical success of market economies and you’re sympathetic to a rights-based approach to justice, markets win both on normative and efficiency grounds over regulation. So let’s deregulate.

What I think is wrong about this picture is what the historian Karl Polanyi pointed out in the 1940s and what the anthropologist David Graeber argued in his book on the history of debt: historically, markets have to a large extent been a top-down imposition by a specific social class through government and law. Markets aren’t naturally emerging outside any institutional context; they depend on a huge amount of regulation that tears down pre-existing social norms. So when free market oriented governments deregulate a set of existing rules, that’s just as much a top down change in the institutional constraints as let’s say a new welfare tax. There isn’t quantitatively “less” regulation” because some economic players get more rights to the detriment of others. That amounts to saying that both historically and conceptually there is no pre-political state of nature governed by free market exchanges that has been corrupted by state power.

This leads to my second point on the “corruption of government”. I think libertarians like Russ turn a blind eye to economic power. If there are levels of inequality as important as in the US, “less regulation” will just allow the rich to save the detour through democratic institutions and impose an order with less social mobility, less social justice, less competition– in sum, what has been called “extractive institutions” by the economists James A. Robinson and Daron. I think that, for example, the social ontology developed by Jürgen Habermas gives a much more accurate picture of society as composed of complex and differentiated social spheres/ subsystems interacting with each other. If you want to limit the colonisation of the state administration by the economic sphere, the best (though imperfect) solution is to make sure that
a) there is a public sphere of critical discussion and democratic control (e.g. through public news channels, independent newspapers, but also a culture of compromise and deliberative persuasion) and
b) that the levels of inequality stay in certain limits such as to ensure that the conditions of democratic control remain intact.

I think the current state of affairs in the US shows what happens if none of these conditions is satisfied. Which leads me to conclude that one can appreciate the wonders of the market and still think that libertarianism is a political dead end. Also, living in a country with free university education and universal healthcare is pretty great. Best regards from Paris!

Hi Veit! This is great. I’m always listening to these kinds of discussions and thinking – uhhhhh – is this purely and academic conversation because in WHAT world is there a “free market”? That’s just crazy talk to me. I like the idea of libertarianism somewhat like I like the idea of Plato’s philosopher King. It’s sounds better in theory. When you read the libertarian platform online as I did in this past election, it feels like – ok, so your not really serious about being president because none of this could reasonably ever happen. Or if it can – please show me what that looks like in process.

I want to be a libertarian with limits. An asymptote of a libertarian I guess. It just seems like the entire world would need to buy in for that to happen.

heh, I sometimes think we should put all the work that is so divorced from life/politics as is (merely academic or otherwise) into the genre of speculative fiction (or just wishful thinking), along those lines maybe the philo-fiction folks should take up some of the work of:http://eyeofthestorm.blogs.com/eye_of_the_storm/anarchy_now/

Ha! I love it. We had the wrong genre the whole time, dmf. So much of original academic theory, in the most charitable sense, really is speculative fiction, no? As in untested and invented – done purely for the thought experiment – and paid for on such a basis.

Confession: I’ve been listening to PEL for three-plus years solid now and, although I have my occasional beef with Mark and the gang, their project has been 1,000 times more interesting and helpful than any formal philosophy class I took in college. No wonder their listenership probably beats the most popular and prolific Philosophy prof in the United States.

Keep up the good work, guys, and please stay uber-critical! (Respectfully, you shouldn’t have to be flattering to your guests. I hazard, rather, that it should be the other way around.) You’ll be redeemed by your loyal fans, in the Comments thread, finally.

so many folks seem to confuse prescription and description, add to that all the cases of reification/misplaced-concreteness and there would be very little left in the nonfiction section of the philo bookshop.

What you advise following Habermas is consistent with the advice that would be given by a self-organizing system’s theorist; that is, all the parts ought to be free to constrain each other (i.e., rationally) and the job of power is to keep coercion out of the mutually constraining interactions. This, of course, is also what Kant advises in “What is Enlightenment?”.

I think there is some confusion here over the reality of emergent order vs. the attractiveness of emergent order. Emergent order is just a phenomenon of self-organization. There is no bread czar who decides how much bread and which kinds of bread will be produced. There is no flour czar who decides how much bread will be produced vs. pizza. No one is in charge of the distribution of sushi restaurants. No one is in charge of these decisions yet there is fresh bread in most cities around the world, plenty of pizza and pasta and cakes and most (all?) cities in the US with 50,000 people or more have access to sushi. How this happens is or at least should be part of what people learn who study economics. These examples of emergent order turn out pretty well. Amazingly well when you realize that no one is in charge. Could they serve hungry people better? In theory, absolutely. They are imperfect in many ways. Another interesting part of economics is understanding the impact of various ways of intervening in the market for bread or flour.

But of course not all things that emerge from the bottom up are good. Racism, traffic, the level of volume of talking in a restaurant with bad acoustics and big crowds are examples of self-sustaining, self-organizing systems that are particularly unpleasant.

I’m not saying much more than that. You can understand the role emergent order plays in a modern decentralized economy and still be a socialist. The existence of self-organizing systems doesn’t prove that government is bad and of course, government helps sustain many good emergent orders through government’s role in establishing and enforcing property rights, contracts, public infrastructure and so on.

What is at issue for myself Russ, is the question of whether you are misusing the terminology; particularly the terminology of self-organization. One might argue that emergence is a kind of wishy washy term, admitting of degrees. So, for instance, on this way of thinking the temperature in your house might be called an emergent property of your thermostat (a thoroughly mechanical device). This device saves you hiring a person – a temperature Czar – to switch on an off the furnace in order to regulate the temperature in your house (and perhaps in the house of several other people). But a thermostat is not a self-organizing system; either alone or combined with the temperature in your house, because it lacks the necessary internal structure and also some key indicators that have to do with entropy production. This means that any argument from analogy with a truly self-organizing system is flawed (i.e., fallacious), since such an argument depends for its force upon the two things being compared resembling each other in the respects necessary to make the point (whatever it might be). As as side bare note, let me add that if a free market economy was truly a self-organizing system, it would be good (in as much as a snowflake or a cat or any other such product of the universe is good.)

When I think about self organizing systems from a scientific point of view, there can be downward causation of a bottom up emergent system.

That aside, I wonder if one can have their emergent cake and eat it too. I mean, does it have to mean ALL that self organizing indicates? Can’t it just be that he’s saying – hey, there are emergent (in the webster’s version of the word) things that happen in our economy and that many times they work really well and that interfering with this complex “system” (not that kind of system…more like a complicated but not complex system) will typically mess it up more than it will help. I feel like that’s about as deep as it goes. In other words, it’s not this teased out, logically formulated idea such as it is in physics. It’s not one that will produce the kinds of information that one can get by classifying a system as self organizing system. In short, it IS a fast and loose version of the idea. However, can that be helpful? Doesn’t the idea of understanding that many things that happen within our economy are simply not planned and understanding what is planned and what is happenstance is important in how we navigate our economy.

OR – is it that when we don’t follow these ideas to their logical conclusion and make those philosophical leaps in thinking that we really miss important insights and hold onto beliefs that ultimately won’t serve us. Sometimes it feels to me like the philosophical angle is one of overthinking and making things complex and it never ends or produces a final answer….the sort of epistemological truth is never to be found. You know what I mean? like – we pull and pull and pull at this thread in this idea until it loses all it’s meaning. Generally I am wrong about that i think. I certainly wouldn’t keep reading philosophy if I didn’t see value in thinking beyond where many see value in stopping. I think we should keep pulling, but I think there can be value in knowledge on every level even if it’s not final or complete knowledge. Understanding that things come about within our economy through no intentional doing of our own and that so many times it’s WAY better than we could have done had we messed with it AND that no one is DOING much of this stuff TO us rather it just happens — well, that’s pretty valuable to me!

I understand that may not make sense. I don’t really explain myself well, but it makes a lot of sense to me! I see value in what you are both saying – that’s my point. And I am so psyched that Russ responded! Very cool of you, Sir! Most of the PEL listeners are much more well versed in all of these topics BTW. I don’t think I am your average listener. 🙂

I am well aware of what Russ is up to and simply wanted to see how he would respond if challenged on that fundamental concept (i.e., emergence). If the economy is more like a thermostat than a cat (or an ecosystem) then he needs to temper his message in order to bring it in line with that reality. What I will call “mechanical emergence” is unremarkable. It can be adequately understood as an aggregate effect of interacting parts and it does not, consequently, warrant the same admiration that one might show for a living thing or a snowflake (e.g, the fact that cars go slowly at rush hour).

Furthermore, I think that when you integrate human laws into the picture (i.e., into a system of people pursuing their own purposes). This is not am example of top-down constraint “on” a self-organizing system. The constraint is rather an instantiation of the very nature of the system, at least insofar as coercion did not play a part in the process through which the law was formed. A whole that governs itself in accordance with laws that it gives to itself is, by definition, self-organizing. Coercion, on this way of thinking, is a mechanism through which the interaction of the parts (i.e, people) is subdued and kept below a critical threshold (e.g., divide and conquer).

Michael and Jennifer–A thermostat is not a self-organizing system. But it is a device that works because of feedback loops. Feedback loops also help sustain the effectiveness of prices in allocating goods–an increase in demand pushes up prices which in turn encourages an increase in supply and helps solve the problem that there isn’t enough to go around. That the thermostat does need a heat-setting czar is a pleasant convenience. That you can pretty much find full shelves throughout an economy is a lot more important.

Top-down intervention can improve outcomes that emerge from the bottom up, but not always. I happen to be a classical liberal–believing in small government (but not zero, please). But as I suggested above, you can still be an interventionist once you understand emergent order. It just forces you to take a different perspective and reduces some dangerous forms of hubris.

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